America’s War on Tourists

Foreign visitors are a goldmine for the U.S. economy, so why do we make it so hard for them to get here?

People line up while waiting for a flight at Terminal 4 of John F. Kennedy International Airport

Photograph by Chris Hondros/Getty Images.

For a depressed economy, exports function as a magic elixir. Demand—and with it jobs—appears from outside, generating new income that cycles through the economy, This is why President Obama, as part of his recovery strategy, has set a goal of doubling exports over five years.

Talk of exports normally conjures up images of factories and container ships, but many of America’s exports are services. The nation’s biggest service export is in some sense not an export at all—it’s travel and tourism, an industry begging for respect on National Travel and Tourism Week. I’m pleased to report that America’s international travel export sector is healthy, with nominal revenues reaching an all-time peak last year of $153 billion—about 1 percent of GDP. Still, despite recent successes, it’s not clear that American tourism has ever really recovered from the tough blow it took after 9/11, suggesting there’s plenty we could do to further boost the industry.

As far as the national balance sheet goes, tourism functions exactly like an export. Foreigners come here and spend money, leaving extra funds in American hands, with which we can purchase oil and Chinese toys. It’s an export realm in which the United States has very strong fundamentals.

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For starters, our country is large and diverse. We’ve got beaches, we’ve got snowcapped mountains, we’ve got deserts, and we’ve got cities. We’ve got great art museums and we’ve got the Grand Canyon. Wide open spaces and Manhattan. In other words, there are American destinations to suit any taste. The diversity of the country and open-mindedness of the national palate mean a major American city is one of the best places to sample a wide array of global food. A Chinese visitor to Chicago will find neither the world’s best tacos nor its best pasta, but a dramatically better mix of the two than you’d find in Mexico or Italy. A trip from Rio de Janeiro to New York or Los Angeles will grant you a wider variety of Asian cuisines than just about any Asian city.

Tourism also benefits directly from the structure of the American economy. Whether you like the European welfare state model or hate it, there’s no doubt that it has a powerful impact on relative prices. By using tax dollars to finance social services, Finns obtain cheaper health care and education while paying much more for almost everything else. But nobody deliberately goes to the doctor on vacation, and visitors to Helsinki don’t benefit from the first-rate public schools. The United States, with its low taxes and plentiful land, is one of the cheapest of the rich countries to visit.

Tourism ought to be one of the main ways in which the United States benefits from global growth. With per capita GDP surging in China and generally on the up in India and Latin America, more people than ever can afford to travel. But American public policies are not helping foreign visitors as they could. Everyone knows American transportation infrastructure is in many respects subpar, but few acknowledge the direct link this has to a key element of our international trade. Upgrading our airports, air traffic control, and rail and highway links would make it easier for visitors to come and spend. National parks and public lands, also facing major budget pressure, are critical elements in maintaining America’s appeal as a destination.